Jarvis hits 'nadir' at half-year

Rail maintenance contracts were handed back to Network Rail

Troubled engineering and construction group Jarvis says it has hit the "nadir" of its fortunes after posting a first-half loss of £283m ($549m).

The loss, which compares with a pre-tax profit of £33.7m a year ago, was mainly due to the write-offs in its roads and construction businesses.

The company said agreement had been reached for the sale of the European roads business for £24.5m.

And shareholders have approved the sale of property interests worth £25m.

'Challenging' changes

Jarvis has been selling assets to focus on its new core businesses of rail, road and plant hire operations.

Its rail maintenance contracts were handed back to Network Rail following a series of derailments and its involvement in the Potters Bar rail crash.

We are very confident that this is the end of the bad story Alan Lovell, chief executive Check the Jarvis share price

"The group has had an exceedingly challenging first half-year," Jarvis said in its results statement.

"These results, which have been largely foreshadowed in trading statements... represent the nadir of the group's fortunes."

Jarvis added that since September many of the serious issues facing the group had been resolved.

Student housing projects have proved less profitable than hoped

Meanwhile, chief executive Alan Lovell is understood to have a long-term plan to find a strategic investor to buy up to 40% of the company.

"We are very confident that this is the end of the bad story," Mr Lovell said.

He told BBC Radio 4's Today programme: "We announced just before Christmas some very positive steps towards the future of Jarvis and I'm optimistic that the next set of results will be much better."

Shares in Jarvis soared last week on news that it had offloaded its stake in London Underground consortium Tube Lines.

The sale of the 33% stake to Spain's Ferrovial for £146m came as a lifeline to Jarvis, which has been weighed down by debts of more than £230m.

The company recently warned it could go under if it did not secure a refinancing deal by mid-January 2005.

But last week its banks agreed to extend its credit facilities until March 2006.